Business Loans - Commercial Loans

Business loans are commonly used by business owners to access cash needed for business start up, growth or improvement. There are a wide variety of programs and lenders available, so it’s important to understand your specific needs and pursue a loan that fits your situation.

What Is A Business Loan?

A business loan is a financial tool available to business owners of all sizes who need funding to enhance their business. Small businesses and start-up businesses typically have a more difficult time securing a business loan, but it is certainly not impossible. Regardless of your business size, any lender you work with will want to see firm documentation that supports the viability of the business as well as the purpose for the loan.

What Can I Use It For?

Business loans can be used for many things. Some common uses include start up costs, expansion of the business, capital investments, and refinancing of business debt. Most business owners will pursue a business loan at some point because it is common to need additional funds at various stages of business development.

Where Can I Get A Business Loan?

Banks are a common source of business loans, but they are often more conservative in their lending decisions. For this reason a bank is much more likely to underwrite a loan to a larger or more established business. It’s not impossible to get a loan from a traditional bank if you’re smaller or just starting up, but you will usually need to provide more extensive documentation of your business plans.
There are many other sources of business loans in the UK, so do some research on other lending sources. There are lenders and angel investors that specialize in small or start up loans, as well as venture capitalists seeking larger investment opportunities. Additionally, there are several government programs designed to assist business owners with securing a business loan.

What Documentation Will I Need To Apply For A Business Loan?

Specific documentation will vary somewhat from lender to lender, but there are a few common things that you will be asked to provide:

• A complete business plan, including an overview of the market and customer base for your business
• Personal and business financial statements
• Collateral to secure the loan
• Incorporation or LLC documents (if applicable)
• Proof of ownership or sale if the business was purchased by you
• Tax returns and credit references

These are the basic items you will need, but remember that each lender will probably have other information they will want you to provide.

Are There Different Types Of Business Loans?

Yes, there are many types of business loans and the choices can sometimes be confusing. Examples include small business specific programs, industry specific loans, "micro" loans for small dollar amounts, community development loans, and many others. Whatever your business need, there is most likely a business loan for you offered somewhere.

How Do I Find The Right Business Loan?

Finding the right business loan takes time and effort. Research is the first step; gather information about lenders and programs that may be suited to your needs, and then talk to representatives from these sources to get more details. Outline your specific situation and ask about options that may be available to you. Persistence and perseverance will pay off in your pursuit of a business loan.
Obtaining a business loan can seem a daunting task, but it’s certainly manageable if you’re organized and prepared. Demonstrate to the potential lender that you are a good candidate for the loan by providing thorough documentation about your business. And finally, don’t give up if the first lender you approach turns you down. There many different lenders and programs available so keep searching until you find the one that works for you.